Telefônica Brasil (BOVESPA:VIVT3) - Share price, News & Analysis

Q: What is the Fair Price of VIVT3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

VIVT3 (R$47.06) is trading below our estimate of [[fair value]] (R$51.88)

VIVT3 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	2/6
Financial Health	4/6
Dividends	2/6

VIVT3 Stock Overview

Telefônica Brasil S.A., together with its subsidiaries, provides mobile and fixed telecommunications services to residential and corporate customers in Brazil.

Rewards

Trading at 9.3% below our estimate of its fair value

Earnings are forecast to grow 10.05% per year

Risk Analysis

Dividend of 7.32% is not well covered by earnings

Large one-off items impacting financial results

Telefônica Brasil Competitors

Desktop

BOVESPA:DESK3

R$2.2b

Unifique Telecomunicações

BOVESPA:FIQE3

R$1.2b

Brisanet Participações

BOVESPA:BRIT3

R$789.7m

TIM

BOVESPA:TIMS3

R$30.9b

Price History & Performance

Summary of all time highs, changes and price drops for Telefônica Brasil
Historical stock prices
Current Share Price	R$47.06
52 Week High	R$55.35
52 Week Low	R$40.34
Beta	0.050
1 Month Change	-7.82%
3 Month Change	-13.70%
1 Year Change	13.07%
3 Year Change	6.88%
5 Year Change	32.86%
Change since IPO	153.01%

Shareholder Returns

	VIVT3	BR Telecom	BR Market
7D	0.4%	0.6%	-0.1%
1Y	13.1%	7.4%	-29.3%

Return vs Industry: VIVT3 exceeded the BR Telecom industry which returned 4% over the past year.

Return vs Market: VIVT3 exceeded the BR Market which returned -29.1% over the past year.

Price Volatility

Is VIVT3's price volatile compared to industry and market?
VIVT3 volatility
VIVT3 Average Weekly Movement	3.2%
Telecom Industry Average Movement	8.0%
Market Average Movement	5.9%
10% most volatile stocks in BR Market	9.2%
10% least volatile stocks in BR Market	2.9%

Stable Share Price: VIVT3 is less volatile than 75% of BR stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: VIVT3's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1998	32,759	Christian Mauad Gebara	https://www.telefonica.com.br

Telefônica Brasil S.A., together with its subsidiaries, provides mobile and fixed telecommunications services to residential and corporate customers in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G as well as mobile value-added services and wireless roaming services. The company also offers data services, including broadband and mobile data services.

Telefônica Brasil Fundamentals Summary

How do Telefônica Brasil's earnings and revenue compare to its market cap?
VIVT3 fundamental statistics
Market Cap	R$78.81b
Earnings (TTM)	R$6.05b
Revenue (TTM)	R$44.54b

13.0x

P/E Ratio

1.8x

P/S Ratio

Is VIVT3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VIVT3 income statement (TTM)
Revenue	R$44.54b
Cost of Revenue	R$23.61b
Gross Profit	R$20.92b
Other Expenses	R$14.87b
Earnings	R$6.05b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 26, 2022

Earnings per share (EPS)	3.61
Gross Margin	46.98%
Net Profit Margin	13.59%
Debt/Equity Ratio	5.3%

How did VIVT3 perform over the long term?

See historical performance and comparison

Dividends

7.3%

Current Dividend Yield

92%

Payout Ratio

Does VIVT3 pay a reliable dividends?

See VIVT3 dividend history and benchmarks

When do you need to buy VIVT3 by to receive an upcoming dividend?
Telefônica Brasil dividend dates
Ex Dividend Date	Jul 01 2022
Dividend Pay Date	Jul 31 2023
Days until Ex dividend	1 day
Days until Dividend pay date	394 days

Does VIVT3 pay a reliable dividends?

See VIVT3 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is VIVT3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VIVT3?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for VIVT3. This is calculated by dividing VIVT3's market cap by their current preferred multiple.
What is VIVT3's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R$78.81b

VIVT3 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2x
Enterprise Value/EBITDA	6.3x
PEG Ratio	1.3x

Price to Earnings Ratio vs Peers

How does VIVT3's PE Ratio compare to its peers?

VIVT3 PE Ratio vs Peers

The above table shows the PE ratio for VIVT3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	35.4x
DESK3 Desktop	77.4x	n/a	R$2.2b
FIQE3 Unifique Telecomunicações	12.7x	22.5%	R$1.2b
BRIT3 Brisanet Participações	41.6x	68.7%	R$789.7m
TIMS3 TIM	10x	11.2%	R$30.9b
VIVT3 Telefônica Brasil	13x	10.0%	R$78.8b

Forward PE

Price-To-Earnings vs Peers: VIVT3 is good value based on its Price-To-Earnings Ratio (13x) compared to the peer average (35.4x).

Price to Earnings Ratio vs Industry

How does VIVT3's PE Ratio compare vs other companies in the Global Telecom Industry?

Price-To-Earnings vs Industry: VIVT3 is good value based on its Price-To-Earnings Ratio (13x) compared to the South American Telecom industry average (14.6x)

Price to Earnings Ratio vs Fair Ratio

What is VIVT3's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VIVT3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13x
Fair PE Ratio	17.5x

Price-To-Earnings vs Fair Ratio: VIVT3 is good value based on its Price-To-Earnings Ratio (13x) compared to the estimated Fair Price-To-Earnings Ratio (17.5x).

Share Price vs Fair Value

What is the Fair Price of VIVT3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VIVT3 (R$47.06) is trading below our estimate of fair value (R$51.88)

Significantly Below Fair Value: VIVT3 is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: VIVT3 is poor value based on its PEG Ratio (1.3x)

Discover undervalued companies

Future Growth

How is Telefônica Brasil forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: VIVT3's forecast earnings growth (10% per year) is above the savings rate (9.2%).

Earnings vs Market: VIVT3's earnings (10% per year) are forecast to grow faster than the BR market (6.6% per year).

High Growth Earnings: VIVT3's earnings are forecast to grow, but not significantly.

Revenue vs Market: VIVT3's revenue (4.8% per year) is forecast to grow slower than the BR market (5.6% per year).

High Growth Revenue: VIVT3's revenue (4.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: VIVT3's Return on Equity is forecast to be low in 3 years time (9.4%).

Discover growth companies

Past Performance

How has Telefônica Brasil performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-0.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VIVT3 has a large one-off gain of R$1.1B impacting its March 31 2022 financial results.

Growing Profit Margin: VIVT3's current net profit margins (13.6%) are higher than last year (10.6%).

Past Earnings Growth Analysis

Earnings Trend: VIVT3's earnings have declined by 0.5% per year over the past 5 years.

Accelerating Growth: VIVT3's earnings growth over the past year (32.8%) exceeds its 5-year average (-0.5% per year).

Earnings vs Industry: VIVT3 earnings growth over the past year (32.8%) underperformed the Telecom industry 288.3%.

Return on Equity

High ROE: VIVT3's Return on Equity (8.6%) is considered low.

Discover strong past performing companies

Financial Health

How is Telefônica Brasil's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VIVT3's short term assets (R$21.7B) do not cover its short term liabilities (R$21.7B).

Long Term Liabilities: VIVT3's short term assets (R$21.7B) do not cover its long term liabilities (R$24.6B).

Debt to Equity History and Analysis

Debt Level: VIVT3 has more cash than its total debt.

Reducing Debt: VIVT3's debt to equity ratio has reduced from 15.3% to 5.3% over the past 5 years.

Debt Coverage: VIVT3's debt is well covered by operating cash flow (482.2%).

Interest Coverage: VIVT3's interest payments on its debt are well covered by EBIT (7.4x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Telefônica Brasil current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

7.32%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: VIVT3's dividend (7.32%) is higher than the bottom 25% of dividend payers in the BR market (1.76%).

High Dividend: VIVT3's dividend (7.32%) is low compared to the top 25% of dividend payers in the BR market (7.89%).

Stability and Growth of Payments

Stable Dividend: VIVT3's dividend payments have been volatile in the past 10 years.

Growing Dividend: VIVT3's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (92%), VIVT3's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (65.5%), VIVT3's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.2yrs

Average management tenure

CEO

Christian Mauad Gebara (48 yo)

3.42yrs

Tenure

Mr. Christian Mauad Gebara serves as Chief Executive Officer of Telefônica Brasil, S.A. (Telefônica Brasil) (formerly known as Telefónica Brasil, S.A. (Telefónica Brasil)) since 2019 and serves as its Dire...

Leadership Team

Experienced Management: VIVT3's management team is seasoned and experienced (5.2 years average tenure).

Board Members

Experienced Board: VIVT3's board of directors are considered experienced (6.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/30 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31